BP sells stake in motor oil arm Castrol in $6bn deal

BP has signed a $6bn (£4.4bn) deal to sell a majority stake in its motor oil division Castrol to a US investment company.

The oil giant sold 65 percent of Castrol, which produces lubricants for automobiles, motorcycles and industrial vehicles, to New York-based Stonepeak.

The deal valued Castrol at $10.1 billion (£7.5 billion) and BP received $6 billion in cash, which it will use to pay off debt and allow it to focus on its core business.

BP will retain 35 percent of Castrol, which it first took control of in 2000.

The London-based oil giant said the sale was a “milestone” in its plans to overhaul its business and cut costs.

BP announced in February that it planned to sell $20bn (£15bn) worth of assets to focus on its core crude oil and gas business and strengthen its balance sheet.

Following today’s agreement and previous announcements, the company announced that it is more than halfway towards achieving this goal.

At the same time shifting its strategy away from investing in green energy and renewing its focus on oil and gas following pressure from some investors upset that its profits and share prices are lagging behind rivals.

Rivals Shell and Norwegian company Equinor have also scaled back plans to invest in green energy, and US President Donald Trump’s call for “baby drilling” has encouraged firms to invest in fossil fuels.

Castrol sale comes in a week BP announces its first female CEOMeg O’Neill will take over in April 2026.

The surprise appointment comes just three months after BP appointed a new chairman, Albert Manifold.

And less than two years after Murray Auchincloss took over as CEO from Bernard Looney, he was given the top job.

Wednesday’s deal is the latest in a series of sales that also include the spin-off of the firm’s U.S. onshore wind business and its Dutch mobility and convenience arm.

Interim CEO Carol Howle said the sale was “a very good outcome for all stakeholders.”

“We are reducing complexity, focusing on our leading integrated businesses downstream and accelerating the execution of our plan,” he added.

Russ Mould, investment director at AJ Bell, said the deal was an “early Christmas present” for BP shareholders.

“The significant proceeds from the transaction will allow BP to make significant progress on its burdensome debt pile. It also means it is well on track to meet its $20 billion liquidation target by 2027,” he said.

BP shares opened higher on the news Wednesday morning, but gave up most of their gains.